It was founded in 1990 by former tour agent Christof Ellinghaus, exclusively to release The Flaming Lips’ In A Priest Driven Ambulance (With Silver Sunshine Stares). With bands The Lemonheads, Das Damen, and Yo La Tengo also looking for a label to release their 1990 albums, City Slang became a home for US bands looking to bring their music to the European market.

City Slang has grown into an extensive and varied catalogue with releases ranging from veteran acts to up-and-coming favourites. It is now home to several European acts, but its focus on US- and Canada-based acts remains, maintaining its established relationship with several key North American independent labels such as Merge, Arts & Crafts, Barsuk and several others.

On 1st October 2011, the label opened an additional European headquarters in Paris, under the title of City Slang France.